Friday, July 22, 2011

Leading Economic Index Increases in June

Despite a lot of uncertainties and concerns about a pending economic slowdown, the Conference Board reported yesterday that its Leading Economic Index (LEI) increased again in June, as part of an upward trend in the index that started in April 2009 (see chart above). The ongoing increases in the 10-variable composite economic forecasting index suggest that positive economic growth will continue this year, even if the rate of growth moderates, and the chances of a double-dip recession this year remain very low.

Says Ataman Ozyildirim, economist at The Conference Board: “The U.S. LEI continued to increase in June, but the strengths among the leading indicators have been balanced with the weaknesses in recent months. The Coincident Economic Index, a monthly measure of current economic activity, continued to increase slowly. The leading indicators point to slowly expanding economic activity in the coming months."

In recent weeks, the Conference Board has also reported strong increases in the Leading Economic Indexes for the U.K. (0.6%), Korea (0.4%) and China (0.5%), all for the month of May.

there is ZERO evidence that you can drive real growth by printing money. QE2 had the opposite effect.

destroying the savings of the prudent and productive to bail out the profligate is an even worse plan than taxing the successful to pay the indolent.

you really need to get a basic economics education.

ultra loose money is hampering recovery, not helping it.

CPI is already 8%. you'll trot out that idiot boskin report, written by political hacks and failing to contain any actual evidence, but it'll just make you look foolish again.

look at the prices of imports and exports. you're looking at double digit inflation there according to our trade statistics.

we export wheat, but also consume it here. we import cars, but make them here. add up the trade component and the domestic component of these goods, and you're at 1/3+ of the economy. that piece alone will drive 4%+ inflation if every other price in the US were flat, which is nothing like true.

there is no credible case for zero inflation.

not even the heavily adulterated CPI is reading low any more. even it ran 3.6% year on year in june.

that's almost double our target and climbing rapidly. (and not even half the real number)

sorry bunny, but there is literally ZERO data on you side, even from the BLS.

inflation is well above target and rising.

QE has failed to stimulate anything but federal debt and the fed balance sheet. twice.

you repeat this "print your way to prosperity" mantra endlessly, but it's as wrong an idea now as it was when you started blabbering about it years ago.

“Our estimated monetary reaction functions for the PBoC’s show that thekey factors of monetary policy are economic growth and inflation, which are in fact the PBoC’s stated mandate. Of the two main policy objectives, the PBoC appears to react more strongly to deviations of growth from targets.”

Okay, so the Hong Kong Monetary Authority says that mainland China tilts towards growth with their monetary policy. And let’s look at Japan: We know the Bank of Japan puts inflation-fighting first.

And what has been the result? How have the two nations fared in the last 20 years?

Answer: China has boomed, while Japan is shriveling.

This is the argument we need to bring to the public. This is the insight we need at this time.

I will re-phrase the question (so Paul's ears do not burn):

Is your ascetic, platonic love of self-denial and low inflation so intense, that you are willing to do without the carnal joys of economic growth for 10 years?

You want the American economy to rot for 10 years just to keep inflation low?

BTW, Morgan Frank's collection of cranks and crackpot stats do not reflect the real world. The core CPI for the last 12 months is 1.6 percent. And that may overstate the case.

"You want the American economy to rot for 10 years just to keep inflation low?"

It's a nonsense question. The best way to get the economy growing is to kick your boyfriend's socialist ass to the curb in 2012. By the way, the Democrats in the Senate just voted down the "Cut, Cap, and Balance" bill on a party line vote so your boyfriend didn't have to veto it. Shall we blame the Tea Party for this, Benji boy?

"BTW, Morgan Frank's collection of cranks and crackpot stats do not reflect the real world."

Why do you persist with your doomed throw downs with a gangsta' like Morganovich? He sends you running home to mama with a mouth full of dirt and your underwear pulled clean up over your head every time you do it.

there is ZERO evidence that CPI is too low. you are just falling for the same political whitewash clinton used to rein in entitlement growth.

CPI no longer has anything to do with the price level. it's a political lie created for budget purposes.

so you tell me oh genius of the bar stools, how can imports and exports be up double digits in price while the economy as a whole shows low inflation?

and don't say "housing". you know damn well that home prices only effect the few that buy in a given year and move owner equivalent rents very little (and that rents have been spiking for 2 years). housing didn't drive inflation in 2007, it's not going to drive disinflation now.

The one indicator that is a 100% predictor of impending recession is when the unemployment rate goes up by 0.5% (regardless of the number of months, required to accomplish this.) We're Now up 0.4%. This month will, likely, put us up to 0.5%.

The second, virtually certain, indicator is a very large rise in the cost of gasoline. We've, basically, doubled since the 2009 low.

1971 Nixon took us off the Gold Standard, and, some would say, put us on the "oil standard."

Then, he institutes "Price Controls," which builds up a tremendous inflationary pressure. Of course, we were much more highly "unionized" back then, which caused wage/price spirals to really, really "Spiral."

There was tremendous Demand for American products from a world that hadn't fully recovered from WWII.

Then, there were the oil shocks.

You are correct when you say, all periods are different. And, the seventies, and the "tweens" were/are really different.

And, btw, Benny's right about one thing. Inflation is the Savior of the Fiat Currency. That's the reason for having such a thing.

"Why do you persist with your doomed throw downs with a gangsta' like Morganovich? He sends you running home to mama with a mouth full of dirt and your underwear pulled clean up over your head every time you do it."